SINGAPORE: The Taiwan dollar hit a near eight-month high on Monday, leading gains among its Asian peers, as weaker US growth data weighed on the greenback while investors hesitated to add bets on regional units, seeing some of them as overbought technically.
Taiwan's currency found continuous support from local exporters and foreign institutional investors, hitting 29.110 per US dollar, the strongest since September 8.
Agent banks of the central bank were spotted buying US dollar/Taiwan dollar below 29.200, but the bids were tepid, dealers said.
Technically, the Taiwan dollar is seen having room to appreciate more, probably to 29.006, the 76.4 percent Fibonacci retracement of its weakening between May and October last year, without intervention.
But the island's central bank is unlikely to let the currency keep rising, dealers and analysts said. The unit is also seen overbought technically with US dollar/Taiwan dollar's 14-day relative strength index (RSI) well below the 30 threshold.
The central bank "may be willing to let the FX appreciate to help curb inflation," said Frances Cheung, senior strategist for Credit Agricole CIB in Hong Kong.
Taiwan's government has eased controls on fuel prices, allowing them to rise some 10 percent, and it also plans to increase electricity charges.
"But I think things have been puffed a bit and the impact may not be that huge. The CBC is still monitoring Taiwan's exports competitiveness closely, so the current round of rally is likely to be coming to an end," Cheung said, referring to the island's central bank.
The Taiwan dollar's peers also rose with a softer US dollar, but investors held back from making aggressive bets as most regional markets will be closed on Tuesday for Labour Day. Financial markets in China and Japan were already shut on Monday.
The US dollar slid as the world's top economy cooled in the first quarter, keeping alive some market expectations for further policy easing by the Fed.
The hopes for more bond buying by the US central bank helped most emerging Asian currencies to rise versus the dollar.
During April, the Singapore dollar has been the best performer among emerging Asian currencies with a 1.8 percent gain as the city-state's central bank surprised markets with tightening.
The Philippine peso was the next strongest during the month, having risen 1.7 percent on demand from leveraged funds and model accounts.
Those two currencies are seen as technically overbought as 14-day RSIs of US dollar/Singapore dollar and dollar/peso fell below the 30 threshold.
WON
Dollar/won slid to as low as 1,129.7, the lowest since April 6 on supplies linked to foreign investors' recent stock purchases and as South Korean exporters sold it for month-end settlements.
The pair found support near the session low, with a 55-day moving average at 1,129.5, and as local importers bought dollars on dips for payments.
Dollar/won has stayed above the moving average since early April.
Still, some dealers expect the pair to fall more, given foreign investors' demand for Korean shares. Foreigners on Monday bought a net 298.0 billion Korean won ($262.52 million), extending their buying streak to a third day.
"The won is seen having room to go to mid-1,120," said a senior foreign bank dealer in Seoul.
Dollar/won has a 200-day moving average at 1,123.9. The pair has closed above the average since September.
RINGGIT
Dollar/ringgit hit a near seven-week low, but investors covered short positions before the Labour Day holiday.
The pair hovered around the 50.0 percent Fibonacci retracement at 3.0291 of its February-March gains.
If dollar/ringgit ends the day lower than the retracement, it may head to the 76.4 percent retracement at 3.0148.
Its 14-day RSI stood at just above the 30 threshold and it may rebound on short-covering to close gap to 3.0415.
But Maybank said in a note that the rebound would be a good chance to sell the pair on rallies.
PHILIPPINE PESO
Interbank players in Philippines pushed down USD/PHP , selling the pair on rallies, on hopes for more monetary policy easing by the Fed.
Despite the optimism about easing by the Fed, a European bank dealer in Manila said he has not seen or heard of massive inflows into Philippines stocks and bonds.